ACK... some of you may laugh, but I need some advice.
Date: Mon, 03/05/2012 - 13:13
517, 544 and 557 are my credit scores.
I have some bills I neglected for a couple years, a department store credit card, outstanding power bill, health insurance bill, other small stuff.
Since these have been on my report for about 2 years, would it raise my credit score by trying to settle with them? These are all in collections I think.
Besides taking care of these, what can I do to raise my credit? I don't exactly have good enough credit to get approved for any cards, loans, etc.
Thanks!
Paying them will not raise your score at all...not even a point.
Paying them will not raise your score at all...not even a point. Only time will heal....
Hi Nathan, Settling these derogatory accounts in and of the a
Hi Nathan,
Settling these derogatory accounts in and of the act itself does not raise your credit score. However, while they remain on your report your efforts to improve your credit will be weighed down by the fact that you have unresolved and outstanding balances in collections.
Settling these accounts and having them reflect as a zero balance owed will have a net positive effect over time. Combining this while establishing new credit that you maintain with timely payments and less than 35-ish percent utilization will help you bounce back from where you are at today.
You may want to start off with a secured card offered by many banks that can later be converted into an unsecured card. I will use BofA as an example, but your current bank may offer something similar.
BofA offers a secured credit card product where you can deposit as little as $500.00 in savings that will act as a security against your failure to make payments on a secured card issued to you with a $500.00 limit. You cannot touch the 500.00 in savings unless you close the secured card.
You could use the card once a month for lunch and pay it off right away.
After as little as 6 months of establishing the account, BofA provides the opportunity to convert the card to unsecured with the same 500.00 limit. You can then remove the 500.00 from the savings account.
Some banks (including BofA) may require a larger than 500.00 amount to establish the account. Some banks (including BofA) will require longer than 6 months before converting the secured account to unsecured. Some may not offer the option to you at all after the application review.
Many local credit unions offer a tool such as outlined above to their members as a credit rebuilding tool.
Best of success in your efforts!
So... It is pointless for me to even pay? There is nothing I can
So... It is pointless for me to even pay? There is nothing I can do now?
Repairing Credit
Credit scoring is a reflection of how you deal with debt.
You can't 'fix' the past but you can take steps to improve it as you go forward.
There is no secret technique or shortcut to make your score jump.
That being said, you were given good advice as far as trying to establish new credit with a secured card. If you can afford to pay back the old debt, that would also help to improve your scoring.
The credit agencies are also concerned with your trend. As your bad debts age, they will be less relevant to your score. If you stay on top of your credit from now on it will eventually improve.
